GST Law Is a Complete Code: MP HC Questions Parallel IPC Prosecution, Grants Anticipatory Bail In ITC Fraud Case

The Madhya Pradesh High Court at Jabalpur has held that has granted anticipatory bail to Dheeraj Gupta, an accused in a high-value GST fraud case involving alleged fake firms and bogus Input Tax Credit (ITC) transactions, while making significant observations on the exclusive nature of the GST law which is a complete code in itself and the impermissibility of parallel prosecution under the IPC for the same set of allegations. The bench of Justice Sandeep N. Bhatt has observed that there is no doubt that the offence is essentially punishable under Section 132 of the GST Act but there are provisions of CGST Act, 2017 which can be considered as complete Code itself. The prosecution case originated from a complaint by an agriculturist who alleged that his documents were misused to create a proprietorship firm—Maa Narmada Traders—and obtain GST registration without his informed consent. It was alleged that multiple bogus firms were floated to generate fake invoices and fraudulent GST returns, leading to massive ITC claims without any actual business activity. The applicant contended that he had already been arrested and granted bail in 2021 in connection with proceedings initiated by the Director General of GST Intelligence (DGGI), Pune, under Section 132 of the CGST Act. It was argued that the fresh FIR by the EOW, invoking IPC provisions for the same transaction set, amounted to double jeopardy, relying on Supreme Court rulings in T.T. Antony, Amitbhai Anilchandra Shah, and Arnab Ranjan Goswami. The defence further emphasized that the GST Act is a complete code, containing its own mechanism for investigation, arrest, prosecution, and compounding of offences, and that custodial interrogation was unnecessary, particularly when the alleged offences related to past transactions already examined by tax authorities. After examining rival submissions and an extensive body of precedent, the High Court observed that offences relating to wrongful availment of ITC are squarely covered under Section 132 of the CGST Act, which prescribes a maximum punishment of five years where the amount exceeds ₹5 crore. The GST law contains mandatory procedural safeguards, including prior sanction of the Commissioner under Section 132(6), which cannot be bypassed by directly invoking IPC provisions. Several High Courts have disapproved the practice of GST authorities or police invoking IPC offences independently when the allegations essentially arise under GST law. Since the applicant had already faced proceedings initiated by GST authorities, a second prosecution on substantially the same allegations prima facie attracts the bar against double jeopardy under Article 20(2) of the ConstitutionThe Court also noted that the GST Act permits compounding of offences under Section 138, and therefore, prolonged custodial detention was not justified at the anticipatory bail stage. Considering the nature of allegations, prior proceedings, and settled judicial principles governing anticipatory bail, the High Court held that custodial interrogation was not warranted. Accordingly, anticipatory bail was granted, directing that in the event of arrest, the applicant be released on bail on furnishing a personal bond of ₹5 lakh with two sureties of the like amount. The Court imposed strict conditions, including cooperation with investigation and appearance before authorities when summoned. Non-tampering with evidence or influencing witnesses. Surrender of passport and restriction on leaving India without permission. Sharing live location via Google Maps with investigating authorities Case Details Case Title: Dheeraj Gupta Versus The State of Madhya Pradesh Case No.: Misc. Criminal Case No. 40741 Of 2025 Date: 15/01/2026 Counsel For Petitioner: Sankalp Kochar - Advocate Counsel For Respondent: A. Rajeshwar Rao - Advocate Click Here To Read Order Read More: Income Tax Raids on Ghee Manufacturers Uncover Nearly ₹700 Crore in Unaccounted Transactions

GST Law Is a Complete Code: MP HC Questions Parallel IPC Prosecution, Grants Anticipatory Bail In ITC Fraud Case

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